The body style of this generation Z4 has been around for a couple of years, so the real news here is the new N-20 twin-scroll turbocharged four-cylinder engine. While BMW has a history of producing excellent four-cylinders--the 1973 2002 turbo and the four-cylinder turbo that powered a Brabham to the Formula One world title in 1983--this is the first time in a dozen years that BMW has sold a four-cylinder in the United States. And note that this is not a twin-turbo engine but rather a twin-scroll turbocharger. BMW calls it a "twinpower turbo." The exhaust from two cylinders are directed to one of the two scrolls in a single turbocharger. This increases the engine's efficiency, lessens the lag time it takes to spool up the boost and increases the fun. BMW is getting 120 hp per liter all the while increasing the fuel economy over a six-cylinder model by 20 percent. The engine also has direct fuel injection with the fuel system pressurized to 2,000 psi. This allows for precise amounts of fuel to be delivered at the exact time needed, to help with overall efficiency.

The all-aluminum engine weighs about 40 pounds less than a six-cylinder, and it was built to handle both RWD and AWD applications. Because the engine has two fewer cylinders, the entire engine sits behind the front axle, getting more weight toward the rear of the car and helping with the car's handling balance.

Also coming with the new engine is an eight-speed automatic that gets better fuel mileage than the six-speed manual.

What is it like to drive?

The engine is really good, with a wide torque band from about 1,250 rpm up to 5,000 rpm. On a drive up a twisting mountain road north of Ojai, Calif., we spent most of the time in third gear, using the wide power band to our advantage and amusement. The engine is responsive, especially down low in the rev range. The wide torque band reduces the need for lots of shifting, if you don't want to do it.

Do I want it?

While the Z4 sDrive 28i (yes, that is a mouthful) is a fun car to drive, it's not an all-out sports car. The exhaust note from the N-20 is, well, quiet. With the top down and traveling at any speed, you can't hear any exhaust note. With the top up, the air-conditioning fan is louder than the exhaust. At slow speeds, you catch just a whisper of intake noise. For most buyers of the Z4, a quiet overall ride might be just what they are looking for. But it is not the kind of noise enthusiasts want from their performance car.

However, the big plus here is the overall efficiency. The specific output--120 hp per liter--is outstanding. And while the EPA figures are not yet finalized, BMW expects at least a 20 percent gain over the mileage of the base six-cylinder. That's significant, especially considering the torque is higher and the overall drivability of the new engine is excellent.

And if the Z4 isn't your type of car, BMW will use the new N-20 engine next in the 2012 528i, due in dealerships this September. In that application, BMW expects the EPA highway mileage to come in at 32 mpg. With a government mandate to increase fuel economy across the board, expect automakers to continue to use smaller-displacement turbocharged engines to meet the federal mandate, and to meet customer's needs for performance.